What's Behind the Numbers?

Financial summaries and financial position statements always take up large sections of annual reports. NMF’s recently published Fiscal Year 2015 annual report is no different. There are plenty of numbers, but little explanation. 

Thanks are due to Sandy King, our long-time colleague, friend and partner at West Central Initiative, for helping come up with the ideas here that provide great information about annual reports and foundation endowment structure.

The last two NMF annual reports have been redesigned with less text and more graphics. Besides cutting down on length, the new format met our goals of producing a vivid picture of NMF’s financial status, an easily understood look at our program impact, and a snapshot of our gains in raising funds for the region.

Upon reading the financial section, you may be wondering “Why does NMF have over $63 million in assets?”

Over 65 percent of the assets represent philanthropy – both in terms of NMF’s general endowment and our 345 component and community funds. Of the remaining 35 percent, over 30 percent is restricted for our programs, which include economic development, nonprofit training and capacity building, and program grants. The remaining five percent represents special projects and long-term capital assets, such as NMF’s facility. And, what does this mean? And why can’t we just give all the money away?

Northwest Minnesota Foundation is governed and lives by the rules set forth by the State of Minnesota and the Internal Revenue Service. Since our inception in 1986, NMF has operated as a public charity. Under this designation NMF must raise over 33 percent of our income from the general public. NMF’s current public support far surpasses that number! Each of the many gifts given by our partner organizations and individuals is designated towards a specific use as directed by the donor. Gifts come in many different sizes and with many different structures. NMF exercises our due diligence and follows the rules set forth by our governing structure.

Philanthropy represents the largest percentage of our overall assets primarily because it includes NMF’s permanently restricted endowment fund. In addition, NMF administers more than 345 component and community funds. Their resources are also included in this classification.

NMF’s unrestricted endowment is the financial backbone that supports the many ways we invest resources in our communities for regional success. We began building the endowment as a permanent asset for the region based on the guidance and encouragement of The McKnight Foundation.

Since the early 1990s The McKnight Foundation has offered a matching contribution toward gifts received to build a permanent asset for the region. Over the past two decades, 550+ donors have helped grow the endowment fund to its current level. The unrestricted endowment is YOUR KEY to financial resources for generations to come. Not only are the earnings from the endowment put to work each year to provide current resources to northwestern Minnesota, but the goal of the endowment is to be a long-term, flexible resource for the region – for good, forever.

You can be a part of this ongoing, 30-year philanthropic story. Please consider joining our Circle of Giving with an annual gift of $500 by donating online. We will honor your special commitment with prominent recognition on our website, in our publications, and at our events.

Thank you for your interest in Northwest Minnesota Foundation – we are excited about the future of our region based on our own financial growth, the programs it allows us to continue, and the strength of our partnerships and positive leadership in our rural communities.

 

Thanks for reading,

Lisa Peterson, NMF Senior Development Officer